This paper evaluates the feasibility of using a hybrid system consisting of wind and tidal turbines connected to a microgrid for power supply to coastal communities that are isolated from a main supply grid. The case study is Stewart Island, where the cost of electricity, provided by a central diesel power station, is higher than the grid network in New Zealand. Local residents believe that reducing the consumption of diesel and having a renewable source of electricity generation are two of the island’s highest priorities. Merging a tidal energy source (predictable) with wind (unpre-dictable) and diesel (back‐up), through a microgrid, may be a way to increase reliability and de-crease the cost of generation. Several off‐grid configurations are simulated using HOMER and WRPLOT software. Using two wind and four tidal turbines, plus one diesel generator for back‐up, is the best design in terms of lower greenhouse gas emissions, higher renewable fraction, and re-duced net present cost.